There have been a lot of shifts in the housing market recently. Mortgage rates rose dramatically last year, impacting many people’s ability to buy a home. And after several years of rapid price appreciation, home prices finally peaked last summer. These changes led to a rise in headlines saying prices would end up crashing.
Even though we’re no longer seeing the buyer frenzy that drove home values up during the pandemic, prices have been relatively flat at the national level. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), doesn’t expect that to change:
“[H]ome prices will be steady in most parts of the country with a minor change in the national median home price.”
You might think sellers would have to lower prices to attract buyers in today’s market, and that’s part of why some may have been waiting for prices to come crashing down. But there’s another factor at play – low inventory. And according to Yun, that’s limiting just how low prices will go:
“We simply don’t have enough inventory. Will some markets see a price decline? Yes. [But] with the supply not being there, the repeat of a 30 percent price decline is highly, highly unlikely.”
As you can see in the graph below, we’ve been at or near record-low inventory levels for a few years now.
“This ongoing lack of inventory explains why many buyers still have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won’t allow a price crash in the near future.”
If more homes don’t come to the market, a lack of supply will keep prices from crashing, and, according to industry expert Rick Sharga, inventory isn’t likely to rise significantly this year:
“I believe that we’re likely to see low inventory continue to vex the housing market throughout 2023.”
Sellers are under no pressure to move since they have plenty of equity right now. That equity acts as a cushion for homeowners, lowering the chances of distressed sales like foreclosures and short sales. And with many homeowners locked into low mortgage rates, that equity cushion isn’t going anywhere soon.
With so few homes available for sale today, it’s important to work with a trusted real estate agent who understands your local area and can navigate the current market volatility.
A lot of people expected prices would crash this year thanks to low buyer demand, but that isn’t happening. Why? There aren’t enough homes for sale. If you’re thinking about moving this spring, let’s connect.
In today's competitive real estate market, facing multiple offers has become increasingly common, especially in sought-after neighborhoods. As a homebuyer, navigating …
If you’re looking to buy a home, the recent downward trend in mortgage rates is good news because it helps with affordability. But there’s another way this benefits yo…
When searching for a new home, many factors come into play, and one of the most crucial considerations for families is the quality of local schools and the school dist…
hile securing a mortgage is a significant achievement, it's important to remember that the journey doesn't end there
I often witness the magic that happens when homebuyers choose a house that may not be perfect at first glance but has the potential to become the home they've always …
As the air fills with the festive spirit, the towns of Maplewood, South Orange, and Montclair come alive with a colorful array of cultural celebrations in the month of…
Tired of wrapping socks and scarves every year? Why not treat yourself to the ultimate holiday gift—a shiny new home!
Essex County, New Jersey, comes alive during the December holidays, offering an array of enchanting activities and events that capture the spirit of the season.
Some individuals contemplate dipping into their 401(k) retirement savings as a means to secure a down payment. While this approach offers immediate financial relief, i…
Want to stay one step ahead of the market? Sign up to be on Dyanna's VIP mailing list to receive exclusive listings, real estate news and a lot more.